High Court upholds Chandigarh’s ban on apartmentalisation, citing Supreme Court ruling

The court, however, upheld the administration’s stance, citing a January 2023 Supreme Court ruling in Residents Welfare Association vs. Union Territory of Chandigarh, which reinforced a ban on apartmentalisation to preserve Chandigarh’s Corbusian legacy. The Supreme Court had found that builders and property owners were using a loophole—selling shares in properties and then executing internal agreements to assign different floors to different buyers—effectively circumventing zoning laws.

The High Court ruled that this practice amounted to fragmentation, which is explicitly prohibited under the 2007 Chandigarh Estate Rules. “What is not directly permissible in law is being indirectly permitted under the guise of sale of shares and subsequent MoUs,” the court observed.

For the petitioners, the ruling means they cannot independently sell their share of the property unless the entire property is transferred as a single unit. “Any Memorandum of Understanding (MoU) or agreement amongst co-owners for floor-wise division of a property shall not be registered nor be enforceable in law,” the court stated.

The judgment also provided clarity on the issue of intra-family transfers. While the administration’s public notice allowed co-owners from the same family to transfer shares among themselves, the petitioners questioned whether such transactions would be subject to the same restrictions. The court clarified that intra-family transfers were permissible, stating, “The prohibition against apartmentalisation does not apply where co-owners of the same family choose to reside separately within the same jointly owned building.”

The ruling is expected to have significant consequences for Chandigarh’s real estate market. Many older homes in the city have already been converted into multiple dwelling units, often with different families occupying different floors. However, with the High Court’s decision reinforcing the legal prohibition, any such transactions in the future will be subject to strict scrutiny.

Additionally, the court left the door open for possible reconsideration of the rules by the administration in consultation with the Heritage Committee. “The Chandigarh Administration, if found feasible, may consider permitting sale of respective shares among co-owners, provided it does not lead to further densification,” the ruling said.

For residents, the ruling reaffirms the city’s original character as envisioned by Le Corbusier, ensuring that Phase I remains a low-density residential area. However, for those looking to buy or sell properties, particularly in multi-owner households, the ruling limits their ability to restructure ownership outside of family transfers.